Situational Awareness
Coaching mortgage professionals can become an interesting occupation when so many changes are around us. New rules, regulations, and guidelines seem to appear every day. Changing market trends from largely refinance business for most, into a more traditional purchase heavy market have left some originators grasping for the last wave of refinance business and others trying to recreate their businesses into a more purchase focused direction. There should be no panic in either direction for those making their living originating loans, what is required is a certain €situational awareness€ that hasn't been required for a while.
I bring this up as a result of a conversation with one of my clients this past Tuesday. John has been a client for a few years and has grown his business at a very steady pace from about $18 million in annual production to a little more than $35 million and still growing. So John isn't a rookie by any means and he has always maintained a solid mix of purchase to refinance business in comparison to his local market. Any way, we were discussing a former client that he had lost touch with. This former client managed to find him and began to discuss a loan situation he had. It turns out that this former client had the original loan John had done for him years ago that was a 30 year fixed over 5%, and had went out and acquired a second mortgage that was at more than 7%. Clearly John had some work to do here. The client had more than enough equity in the property, solid income, and more than required credit that made this a very simple loan to do, and would save this client a lot of money.
John wondered just how this client could have ended up in this position. Who could have ever looked at this client and written a second mortgage when it made so much more sense to just refinance the entire loan. The answer was clear; the customer got exactly what he asked for. He went online, looked up second mortgages, found a few lenders and their offerings, and got his second mortgage. Nobody bothered to ask him any questions. Not even a glance to see that this situation would have been better handled by a complete refinance. Nobody asked, so the customer got exactly what he asked for!
We are required to have situational awareness. People aren't really stupid; they often just make uninformed choices. I am sure if presented with the option of refinancing and saving a bunch of money, this client would have never elected to take the second mortgage. He didn't know to ask. He was not aware that while he did have a way to fill his need, it wasn't his best option.
This is our job. We are the professionals required to provide all of the options for our clients. We need to do a good job of asking questions. We need to listen to what the client says and know that what they might be asking for really isn't what they need.
In today's market we are seeing stress on homes listed for sale. We often have people in multiple bid situations, losing homes for a few dollars they could have easily afforded to pay for had they just known of all their options. We need to educate and inform our clients so that they make informed choices. We need to work with our referral partners and share with them the information on how to make transactions flow smoother. We need to become better each day at listening to our clients so that we are able to serve them better and allow them the freedom of know all of their options.
Situational awareness is the sign of a true professional. It requires gathering information and exploring options. What are the real goals of this client? What are they really looking to do? Does this client need a cash-out refinance, or would they be better served by selling their home and buying a different one? In the long run we are measured not by how many loans we do but by how satisfied our clients are with the choices they made from the options they had. Did you just do a loan, or did you provide a proper solution? Part of how we are measured is by how satisfied our clients were with the entire experience.
Listen to want the client says. Understand their goals and then help them select a solution to their specific set of challenges. It's not always about the rate they get, the costs they pay, but the total experience of how they got from where they were to where the needed to go. Situational awareness is really what we get paid for and what keeps our clients happy and referring us to others.
For questions or comments please contact us at:
http://www.improvemytomorrowcoaching.com
I bring this up as a result of a conversation with one of my clients this past Tuesday. John has been a client for a few years and has grown his business at a very steady pace from about $18 million in annual production to a little more than $35 million and still growing. So John isn't a rookie by any means and he has always maintained a solid mix of purchase to refinance business in comparison to his local market. Any way, we were discussing a former client that he had lost touch with. This former client managed to find him and began to discuss a loan situation he had. It turns out that this former client had the original loan John had done for him years ago that was a 30 year fixed over 5%, and had went out and acquired a second mortgage that was at more than 7%. Clearly John had some work to do here. The client had more than enough equity in the property, solid income, and more than required credit that made this a very simple loan to do, and would save this client a lot of money.
John wondered just how this client could have ended up in this position. Who could have ever looked at this client and written a second mortgage when it made so much more sense to just refinance the entire loan. The answer was clear; the customer got exactly what he asked for. He went online, looked up second mortgages, found a few lenders and their offerings, and got his second mortgage. Nobody bothered to ask him any questions. Not even a glance to see that this situation would have been better handled by a complete refinance. Nobody asked, so the customer got exactly what he asked for!
We are required to have situational awareness. People aren't really stupid; they often just make uninformed choices. I am sure if presented with the option of refinancing and saving a bunch of money, this client would have never elected to take the second mortgage. He didn't know to ask. He was not aware that while he did have a way to fill his need, it wasn't his best option.
This is our job. We are the professionals required to provide all of the options for our clients. We need to do a good job of asking questions. We need to listen to what the client says and know that what they might be asking for really isn't what they need.
In today's market we are seeing stress on homes listed for sale. We often have people in multiple bid situations, losing homes for a few dollars they could have easily afforded to pay for had they just known of all their options. We need to educate and inform our clients so that they make informed choices. We need to work with our referral partners and share with them the information on how to make transactions flow smoother. We need to become better each day at listening to our clients so that we are able to serve them better and allow them the freedom of know all of their options.
Situational awareness is the sign of a true professional. It requires gathering information and exploring options. What are the real goals of this client? What are they really looking to do? Does this client need a cash-out refinance, or would they be better served by selling their home and buying a different one? In the long run we are measured not by how many loans we do but by how satisfied our clients are with the choices they made from the options they had. Did you just do a loan, or did you provide a proper solution? Part of how we are measured is by how satisfied our clients were with the entire experience.
Listen to want the client says. Understand their goals and then help them select a solution to their specific set of challenges. It's not always about the rate they get, the costs they pay, but the total experience of how they got from where they were to where the needed to go. Situational awareness is really what we get paid for and what keeps our clients happy and referring us to others.
For questions or comments please contact us at:
http://www.improvemytomorrowcoaching.com